OFAC – International Trade Law Compasshttps://internationaltrade.foxrothschild.com
Mon, 26 Aug 2019 14:11:28 +0000en-UShourly1https://wordpress.org/?v=4.9.11https://internationaltrade.foxrothschildblogs.com/wp-content/uploads/sites/39/2016/08/cropped-cropped-favicon-32x32.pngOFAC – International Trade Law Compasshttps://internationaltrade.foxrothschild.com
3232Sanctions Compliance Directly Impacts Executiveshttps://internationaltrade.foxrothschild.com/2019/05/articles/office-of-foreign-assets-control-ofac/sanctions-compliance-directly-impacts-executives/
https://internationaltrade.foxrothschild.com/2019/05/articles/office-of-foreign-assets-control-ofac/sanctions-compliance-directly-impacts-executives/#respondFri, 10 May 2019 17:43:35 +0000https://internationaltrade.foxrothschild.com/?p=675In OFAC’s guidance document that was released last week, OFAC made it clear that it will consider using its enforcement authority against the individuals involved in a sanctions violation, not just the entities. OFAC recognized that individual employees, particularly those in supervisory, managerial or executive level positions, have played a crucial role in facilitating or concealing violations of OFAC’s sanctions programs. The executives subject to OFAC’s jurisdiction are individuals at a company with a U.S. parent, or an entity that conducts transactions in the U.S., with the U.S. or a third party that is based in the U.S.

OFAC generally administers and enforces economic and trade sanctions based on U.S.-foreign policies and national security goals against individuals, groups and entities engaged in activities that threaten the national security, foreign policy or economy of the U.S. The recent guidance makes it clear that executives are not beyond the reach of OFAC, and that individuals are subject to personal liability for violating OFAC’s sanctions program.

Although this is not a new right granted to OFAC, the guidance indicates that OFAC is more inclined to bring civil actions against individuals. In the past ten years, we have seen only a few cases where civil enforcement actions were brought against individuals. Although there has been a significant dip in the number of cases, the value of the fines has increased significantly.

Executives should make sure that the company’s sanctions compliance program incorporates at least five essential components of compliance: (1) management commitment; (2) risk assessment; (3) internal controls; (4) testing and auditing; and (5) training. The commitment of executives to the success of the sanctions program is key, and it is covered by the first of the five components.

OFAC stated in its guidance that “Senior Management’s commitment to, and support of, an organization’s risk-based [sanctions compliance program] is one of the most important factors in determining its success.” Senior management must recognize the seriousness of apparent violations of the laws and regulations administered by OFAC, and implement measures to reduce apparent violations and address root causes of past violations.

OFAC has identified scenarios where supervisory, managerial or executive employees of an entity have conducted or facilitated transactions with OFAC-sanctioned persons, regions or countries even though the entity itself had a strong compliance program in place. It is the personal responsibility of each of these individuals to take their senior management role seriously, help their organization comply with its sanctions compliance program, and make sure it is not concealing activities from its organization or regulators and law enforcement.

You can read OFAC’s guidance here. The guidance deals broadly with OFAC’s perspective on the essential components of a proper sanctions compliance program that should be implemented by companies, as well as outlining how OFAC incorporates these components in its evaluation of apparent violations.

]]>https://internationaltrade.foxrothschild.com/2019/05/articles/office-of-foreign-assets-control-ofac/sanctions-compliance-directly-impacts-executives/feed/0OFAC Sanctions 271 Syrian Individualshttps://internationaltrade.foxrothschild.com/2017/04/articles/global-trade/middle-east/ofac-sanctions-271-syrian-individuals/
https://internationaltrade.foxrothschild.com/2017/04/articles/global-trade/middle-east/ofac-sanctions-271-syrian-individuals/#respondWed, 26 Apr 2017 13:18:23 +0000https://internationaltrade.foxrothschild.com/?p=357On Monday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) leveled one of the largest sanctions actions in OFAC’s history. OFAC sanctioned 271 employees of Syria’s Scientific Studies and Research Center (“SSRC”).

According to OFAC, the SSRC is responsible for developing chemical weapons that were used against civilians by Syrian government forces earlier this month in Khan Sheikhoun, Syria. OFAC has stated that these 271 designated individuals are scientists who have expertise in chemistry and related scientific disciplines and have supported the SSRC program since at least 2012. OFAC has stated that these individuals are working on developing chemical weapons for Syrian President Bashar Assad.

Because of the sanctions, U.S. persons are now generally prohibited from conducting business with these designated individuals. Any property or interest in property of the 271 individuals in the possession or control of U.S. persons or within the United States must be blocked. Additionally, U.S. banks have been ordered to freeze the assets of any employees that have been named.

The sanctions more than double the number of individuals and entities sanctioned by the United States pursuant to Syria-related Executive Orders. These sanctions are intended to hold the Assad regime and those who support it accountable for the regime’s violations of the Chemical Weapons Convention and UN Security Council Resolution 2118.

The SDN List is a list published by OFAC that includes the names of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.

OFAC implements and imposes sanctions against those companies and individuals on the SDN List. Any US citizen, permanent resident alien, entity organized under the laws of the United States (including foreign branches), or any person (i.e., individual or entity) in the United States (collectively, “U.S. persons”) are generally prohibited from dealing with these companies and individuals, including transactions involving commerce, business, trade or finance. U.S. persons must block any property in their possession or under their control in which a company or individual on the SDN List has an interest.

When doing business with a foreign company or individual, it is important to access the SDN List to ensure that transactions with that foreign party are permissible. U.S. persons are expected to exercise due diligence in determining whether any such persons are involved in a proposed transaction. A failure to review the most up-to-date SDN List and review current sanctions can lead to serious consequences.

For more information on OFAC’s update and to review those added to the SDN List, please visit this page. To review the current SDN List, click here.